While traders and investors operate on the same playground—the financial markets—they play by different rules. Traders are typically focused on short-term trends or the immediate direction of a stock. Investors, on the other hand, are generally looking at the long term—where a company may be three to five years down the road.
It’s no secret that news headlines can move markets. In a recent social media post, the president called for limits on executive compensation at defense companies, suggesting that dividends and stock buybacks be reduced until companies reinvest and modernize production plants. Those comments weighed on the defense sector, sending some stocks down as much as 10%.
A trader might react quickly to that news, while an investor may step back and ask, “Does this materially change the long-term value of the company we own?”
In our experience, the answer is often no. We don’t know how news or political rhetoric will ultimately affect individual companies. Frequently, the narrative that sparked a price decline shifts within days, and the stock may rally shortly thereafter.
That doesn’t mean investors are immune to the news cycle. It’s easy to get caught up in the noise and sensationalism of televised pundits. But at the end of the day, investors should pause and assess what has truly changed. Will the news affect earnings? Is the original investment thesis still intact?
Historically, equities have tended to outperform bonds, cash, and inflation, although past performance is no guarantee of future results, and those returns have come with higher volatility.
When selecting equity investments, we recommend and follow a disciplined process that begins with financial strength and safety. We’ve established minimum criteria in both areas, and any company that fails to meet those standards is excluded. This quantitative screen narrows the universe of potential investments to a more manageable list. From there, we conduct qualitative research, evaluating factors such as growth prospects, competitive positioning, and valuation. Ideally, we look for companies that can not only weather the next recession, but potentially the next depression.
That doesn’t mean our views on an investment can’t evolve. Long-term investing doesn’t imply a buy-and-forget approach. As investors, we trade or adjust positions for fundamental reasons, such as changes to our original investment thesis, or unique financial planning decisions, such as raising liquidity, rebalancing, or tax-loss harvesting.
There is always a purpose behind when and why we trade. It’s not driven by a headline or a social media post. Those decisions should be grounded in a defined process, thoughtful analysis, and an understanding of how each position fits within the broader portfolio. Rather than reacting to headlines or social media commentary, consider evaluating fundamentals, tax considerations, risk exposure, and long-term objectives. That disciplined approach helps remove emotion from decision-making and keeps the focus aligned with overarching goals.
If you have questions on your equity investments, the experts at Henssler Financial will be glad to help:
- Experts Request Form
- Email: experts@henssler.com
- Phone: 770-429-9166
Listen to the January 17, 2026 “Henssler Money Talks” episode.
This article is for demonstrative and academic purposes and is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
